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Is Insurance on the Brink of a Digital Revolution?

April 15 2015

Digital is here

If we are to believe the following statistics put forth by a Google-BCG report, the answer to the above question is a resounding Yes. Insurance ranks in the top five products consumed in the global digital market. As per their survey conducted in eight advanced countries, 70% insurance purchase decisions are influenced by the digital wave.

The Trust Factor

The digital revolution is based on trust, the trust offered by insurance companies and its acceptance by the insurance seekers. This trust is established due to the eradication of the distribution channel. Now, the insurance providers directly engage with insurance seekers via their website, social media or dedicated phone lines.

This activity has negated mis-selling as insurance providers have direct control over the kind of information that is offered to the insurance seeker and the way in which it is being presented.

Security

The government has stepped in to ensure that the consumers get the most of this digital revolution. As per the recently approved Insurance Bill, the Insurance Regulatory and Development Authority of India (IRDAI) has been vested with more powers. These regulatory and supervisory powers allow the IRDAI to levy hefty penalties amounting to crores on insurance companies if found guilty of mis-selling.

This is a positive step for the online insurance segment as one of the factors hampering this sector’s growth was consumer’s apprehensions regarding the working of these financial products and the insurance company’s accountability.

Research

The digital wave has given rise to aggregator websites, which collate insurance related information and present it to the consumers in an easy manner. They allow the consumer to compare insurance policies offered by various insurance providers before purchasing. Comparing policies is a harmless activity however; one must consider all angles before purchasing one.

One can compare policies on aggregator sides but it would be a wise decision to purchase an insurance policy after going on the company's website and scanning all features of the insurance policy rather than choosing a policy just because it is offering low premium.

Automation

Automation has made things easier for consumers as well as insurance providers. For the company, automation results in less manual intervention leading to lesser errors, effort and cost. It also fosters better risk management protocol leading to better underwriting and efficient claim management.

Data management also becomes easier due to which companies can cross sell products. All these automation activities ultimately lead to consumer welfare in terms of better products, quick response time and an enhanced overall experience.

Gamechanger

The gamechanger in this scenario has been the advent of user-friendly insurance websites. Insurance seekers are not aware of the exact product but are motivated by the drive to secure their future. These neatly designed websites with simplified content, guide users towards discovering what they want.

With calculators, articles, Frequently Asked Questions section, policy documents and other investor education initiatives, these websites help insurance seekers understand information, zero-in on a product, purchase it and renew it from time-to-time.

With insurance companies choosing the Internet as a medium to expand their horizon and offer consumer-centric products, all stakeholders associated with insurance industry are poised to benefit from this digital revolution.

Disclaimer

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ICICI Lombard General Insurance Company Limited is one of the largest private sector general insurance company in India offering insurance coverage for motor, health, travel, home, student travel and more. Policies can be purchased and renewed online as well. Immediate issuance of policy copy online.